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City Hall update: Property tax relief

The City Council on April 29 diverted $2.8 million from street paving projects into a “property tax relief account” that might quell a property tax hike for homeowners in 2012.

Council Member Betsy Hodges (13th Ward), who authored the tax relief account, said $2.8 million is the equivalent of a 1 percent reduction to a tax hike. For example, if the city needed to raise the tax levy by 3 percent, $2.8 million would reduce that increase to 2 percent.

“Cutting the city paving program is not something I would suggest lightly,” she said. “But knowing the burden faced by our property tax payers in 2011 and knowing what they are likely to face in 2012, I think this is one opportunity we have to provide some potential property tax relief.”

The city increased property tax collections by 4.7 percent in 2011, though the increase was even steeper for many homeowners.

The caveat to the property tax relief account is that it hinges on what the Minnesota Legislature does with local government aid to Minneapolis.

The city was certified to receive $87.5 million in state aid this year. But if recent history is any indicator, the city could lose some of that.

The city has set up a waterfall of budget cuts that would go into motion should state aid be cut. If the state cuts more than $14 million to aid to Minneapolis, that tax relief account would begin to disappear.

Last year Minneapolis received $26 million less than what it had been certified to receive.

“It will make it clear to the Legislature that they will be raising taxes depending on their choices this year,” Hodges said.

Gov. Mark Dayton has proposed making no cuts to Local Government Aid. The GOP has proposed $39 million reduction to LGA for Minneapolis.

The $2.8 million comes from the city’s $9 million asphalt pavement resurfacing program.

Hodges urged other council members to explore additional projects and spending that could be diverted into the tax relief fund.

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Plymouth Avenue bridge gets state funding for repairs

The Minnesota Department of Transportation recently awarded the city of Minneapolis $2.145 million in state disaster funding to repair the Plymouth Avenue bridge over the Mississippi River.

The city is still searching for roughly $5 million more to complete the $7 million repairs. Gov. Mark Dayton proposed a bonding bill that would have picked up the tab. The GOP-led Legislature has indicated it will wait until 2012 to do its own bonding bill.

The bridge was closed in October due to deterioration. It has since been re-opened to foot and bike traffic, but vehicles are being re-routed to the Hennepin and Broadway bridges.

The $2.145 million comes from a special funding pot from the state gas tax and is meant for disasters in cities, said MnDOT official Julie Skallman.

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Resident survey reveals changing attitudes

Minneapolis residents are more concerned with education, public infrastructure and property taxes than in previous years, according to the Minneapolis Residents Survey, which is conducted every few years by the National Research Center.

Nearly 1,200 city residents responded to the survey between Feb. 1 and March 10. The survey had a 23 percent response rate and has a 3 percent margin of error.

Asked to identify the three biggest challenges facing Minneapolis, residents put education (35 percent) at the top of the list. Public safety was second (28 percent) followed by public infrastructure (23 percent), property taxes (21 percent), job opportunities (21 percent), transportation (21 percent), economic development (19 percent) and housing (14 percent).

When the survey was last taken, in 2008, residents put public safety (44 percent) at the top of the list, followed by transportation (37 percent) and education (29 percent). Property taxes was not a category in previous surveys.

About 53 percent of respondents said they would agree with raising property taxes or fees in order to maintain or improve city services. While 12 percent strongly agreed with raising taxes, 17 percent strongly disagreed.